CADE convicts cartel in market of international air and maritime freight

Last Wednesday, 12 May, the Administrative Council for Economic Defense (CADE) convicted four companies, seven individuals, and a business association for participating in a cartel and inducing collusion in the international air and maritime freight markets to and from Brazil, with fines coming to BRL 31.2 million.

The investigation started from the signature of a leniency agreement. The administrative proceedings were initiated in August 2010, after a search-and-seizure operation in the offices of three companies and in the headquarters of the Brazilian Association for International Transport Companies (Abreti) conducted in the prior year.

Commissioner Mauricio Oscar Bandeira Maia stated in its opinion that the collected evidence proved cartel participants made illegal negotiations to pass on national and international charges, surcharges, and tax rate rises to their customers.

At the international level, the unlawful activity, which affected Brazil, consisted of passing on to customers several charges and surcharges internationally imposed on the companies – levied especially on parcels sent to the US – such as the war risk surcharge and the security surcharge.

Nationally, the conduct involved freight forwarders sharing commercially sensitive information typical of the Brazilian market, such as discussing their participation in government procurement processes and the possibility of passing on tax rate rises and charges to customers as these were introduced by the Brazilian government.

The Council also found Abreti used its structure to promote cartel-related interactions amongst companies that were supposed to compete in the national market. For this reason, the entity was found guilty of concerted practices.

Agreements

Considering the agreements fulfilled, the Tribunal of CADE granted the signatories immunity from sanctions related to the violation. Signatories included companies Deutsche Post AG, DHL Logistics Brasil, and Exel Global Logistics do Brasil, in addition to individuals linked to them.

Moreover, the Council dismissed the prosecution of nineteen companies and nine individuals that signed Cease and Desist Agreements, conditional on fully meeting the established obligations.

Access Administrative Proceedings 08012.001183/2009-08.